American tech firms losing business over Snowden's PRISM revelations

Collage: Voice of Russia

Not long after ex-CIA contractor and now-famous leaker Edward Snowden revealed US government's vast data collection programs to the world, American technology firms have started losing millions. That's according to an industry survey released this week. The Cloud Security Alliance said 10 percent of its non-US members have cancelled a contract with a US-based cloud provider, and 56 percent said they were less likely to use an American company.

The online survey was taken between June 25 and July 9, following media revelations of programs that collect the phone logs of millions of Americans, as well as Internet data from the accounts of foreign targets, as a way to thwart terror attacks.

The use of cloud computing system is more founded on trust but the integrity of the cloud technology may no longer be quite trustworthy in case PRISM will operate on the different cloud services. Because the PRISM authorities have access to all the cloud infrastructures, it is easier to penetrate through any cloud user data which has a significant impact on the issue about whether or not cloud computing remains to be a safe computing service among internet and cell phone spy users.

"The PRISM disclosures are damaging, and I think I'm prepared to speculate extremely damaging to commercial firms that have offered cloud and related kinds of services, and that do or would benefit from efficient cross-border data flows," says Philip Verveer, the former US coordinator for international communications and information policy at the State Department.

Already, domestic cloud providers have been hampered in their overseas expansion, particularly in Europe, by a deficit of trust among businesses and consumers who worry about how their data will be handled when it resides in the cloud.

Earlier this week European commission (EC) vice-president Neelie Kroes said US cloud service providers could suffer loss of business in light of revelations about the NSA's PRISM.

"If businesses or governments think they might be spied on, they will have less reason to trust cloud and it will be cloud providers who ultimately miss out. Why would you pay someone else to hold your commercial or other secrets if you suspect or know they are being shared against your wishes?" Kroes said.

US cloud providers have now acknowledged the reputational hit that they have suffered from the leaks, and firms like Google have attempted to clarify their role in the program, insisting that there is no back-door for the government to access their data, and that they only provide the government with users' information in response to a court order. Google, Microsoft and Facebook have also asked the government for permission to make public more information about the national security requests they receive from federal authorities.

But with the PRISM bombshell, they are suffering from a problem of perception, or "atmospherics," as Verveer puts it, though he argues that the revelations "haven't really added anything of substance" about companies' compliance with the government.

At State, Verveer often encountered reluctance from his foreign counterparts who regarded the PATRIOT Act with suspicion, which meshes with the more general perception in Europe that the United States isn't as tough on privacy protections as European Union member states. At the same time, he argued against protectionist policies that would hem in the flow of data in accordance with national borders.

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